JAMES DONNELLY
The Transatlantic Trade & Investment Partnership is a 'Free Trade' agreement being drawn up between the European Union (EU) and the United States of America.
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The Transatlantic Trade & Investment Partnership is a 'Free Trade' agreement being drawn up between the European Union (EU) and the United States of America. Officially, TTIP is being characterised as negotiations between the two trading blocs to remove supposed barriers to trade. These barriers include tariffs, undesirable local regulations and restrictions on investment. These negotiations must finally be validated by the EU's Council & Parliament, making assessments as Congress does in the US.
The purpose of these negotiations is to allow trade to function in a way that means these two blocs find easier avenues to invest and generate capital.
Much has been made of the financial gain but Dr. Gabriel Siles-Brugge, Doctor of Political Science at University of Manchester, says David Cameron is “wrong to argue that billions of pounds will accrue from the negotiations between the two power blocks”.
Within the “Reducing Transatlantic Barriers to Trade and Investment An Economic Assessment” document there are claims of €119 Billion and $122 Billion gains for the EU and US respectively. However, Siles-Brugge claims that these figures are “vastly overblown and deeply flawed” as they are coloured by an “overly optimistic view” and “the political imperatives” of those respective interested parties. He goes on to claim that this colouring is an example of rhetoric that continues to emphasise the importance of economic liberalism. He delivers a final blow stating that “similar free-market policies in the financial sector are partly to blame for the economic crisis” and that we need new, progressive policy making, “not more of the same”.
The reporting of the increase of $122 Billion to the US GDP regularly fails to take into account that the gain is $122 Billion in 2027, in 2027 dollars. It is also referred to as a “best case scenario”. The “less ambitious” projection is a mere 0.21% of the GDP, roughly equal to a normal month's growth”. The 14 years it takes to gain this 0.21% gain means it has a growth of 0.015% annually, which works out at 15 cents a day. This was the conclusion of the study by the Centre for Economic Policy Research (CEPR, UK), which is the main supportive organisation behind the trade deal.
Part of the TTIP's aims is to reduce or eliminate “non-tariff trade barriers”, which is jargon for constitutional & legal norms (including ethical, health & technical norms). The proponents of the bill argue that these non-tariff barriers represent limitations to the scope of economic competition which is defined as a “supreme, inalienable fundamental freedom”.
The most contentious aim is to allow private firms to litigate against local, sovereign laws and regulations that these firms see as 'unnecessary obstacles to trade'. These litigations will be enacted through 'dispute settlement mechanisms' outside of the national jurisdiction. These mechanisms have been named 'Investor State Dispute Settlements'(ISDS) and essentially allow firms to sue a government for loss of income, due to their domestic regulations. These extra-judicial court systems represent undemocratic practices, unfairly weighted towards firms and not citizens. Governments will become hesitant to disagree with abusive conduct due to fear of financial punishment.
The commission argues that ISDS are necessary in courts that “might be biased or lack independence.” Kenneth Clarke continues this strand, stating that ISDS was designed to “support business in countries where the rule of law is unpredictable”. So, why is it being used in an EU/US context? Is Clarke suggesting their rule of law is unpredictable? If so, unpredictable for whom? But to pass up on the financial gains would be “Scrooge-like”, according to Clarke, completely missing the point of Scrooge.
This ISDS legislation has some previous precedent with other Free Trade agreements. Regulations cover Workers' Rights, Banned Food, Safety Laws, Private Data security, IP & Copyright & environmental legislation. Currently, Tobacco Giant Philip Morris is suing Australia for plain packaging and Ethyl is suing Canada for banning their neurotoxin gasoline additive and gained £13,000,000 in the process.
What the TTIP arguably represents is a power play of unprecedented scale. As neoliberalism wains in its political pull, State Capitalism is no longer the order of the day.
Pacific Rim sued El Salvador for saving their national river system from Gold-mining caused destruction. A US corporation is suing Canada for banning their carcinogenic pesticides. If the TTIP takes hold in the EU, Car manufacturers could import US cars not fit for UK regulations, Big Pharma could restrict price controls and monopolise patents and the NHS could be permanently privatised; as any government, and therefore its taxpayers, looking to reverse the action would be punished.
You'll notice that I've used the word 'could' as this is speculation based upon the tiniest morsels of information in any form on this deal. The EU Parliament's Trade Committee don't get a “proper look at the negotiating document, and most MEPs don't get any say on the deal until they are “presented it as fait accomplit”, according to Green Party MEP Keith Taylor. DeGucht states that “the US is against transparency” and if they dropped the ISDS, their would-be progress in the deal, but they don't want to budge on it.
The European Commission are also dedicated to the “management of stakeholders, social media and transparency”, according to a leaked internal memo. It also states that there was a need for a “dedicated communications operation”. The commission has held 8 meetings with civil society groups in the open and disclosed information online. However, the 119 meetings with corporations and lobbyists were not. The Commission is made up of 93% lobbyists and 7% consumer protection panels, Trade Unions or Civil Society Groups.
Advising the EU Commission is the Council of the International Regulatory Strategy Group (IRSG).The group is led by financial practitioners whose purpose is to shape the “international regulatory regime, at global, regional and national levels”, or in simple terms a lobbying group. Its chairman is a former Governor of the Bank of England. Its Deputy chair, a City of London Corporation (CLC) employee and Executive Board chair an employee of the CLC's PR wing. The Council itself is made up of seven observers from the Treasury, Foreign Office, Business Department, Bank of England and all three of Britain's financial regulatory bodies.
Kenneth Haar, CEO Researcher believes that “this model puts the business groups with regulators to essentially co-write legislation” and that “the odds are that it will result in a major deregulation offensive” (corporateeurope.org, 2013). Group Chief Executive of ‘Which?’, Peter Vicary-Smith shares Harr's scepticism stating that the deal could represent “a Trojan Horse to reduce consumer protection”.
This de-regulatory legislation is also coupled with convergent regulation. With a comparatively lax legislative attitude to data security, food, health & environmental issues, US legislation being used as a point of regulatory convergence means that the EU's standards would have to drop as negotiations continued. Combined with the concurrent Trans-Pacific Partnership (TPP), these trade deals represent 60% of the world's trading GDP. This would create the largest Free Trade Area, which could transform the global economic and political sphere for good. It's equatable to an international coup that “dispenses with the idea of national sovereignty, and pours scorn on the notion of elected government”.
What the TTIP arguably represents is a power play of unprecedented scale. As neoliberalism wains in its political pull, State Capitalism is no longer the order of the day. Instead a corporatist deregulation of domestic life could lead to a stronger new Capitalist Statism where “Corporations rule, and do so more effectively than the state, as its exploitative tentacles reach into the cultures and bodies of the people who serve it and who are cast aside by it” (Suvin, cited in Baccolini, 2001, p.189)”. This view sees capitalism as the transformational force which drives our world into the totalitarian excesses of Capitalist Statism, where the Free Market has a “supreme, inalienable fundamental freedom”.